Introduction

US Trade Representative Robert Lighthizer issued a statement on 2 August 2018 advising that President Trump had directed him to consider raising the previously proposed 10% additional duty to be applied to $200 billion worth of Chinese goods (referred to as the List 3 products) to 25%. It appears that this action is in response to the Chinese retaliatory reaction to the imposition of 25% duties on List 1 products, implemented on 6 July 2018 and the current consideration of an additional 25% duty on another $16 billion of Chinese imports (List 2 products).

US and China responses

In response to this latest US announcement, on 3 August 2018 China announced that it had prepared a list of $60 billion worth of US goods to levy with duties should the United States impose duties on the proposed additional $200 billion of Chinese goods as early as next month. The Chinese duties range from 5% to 25% and would be levied on 5,207 types of US import, the Ministry of Finance said in a statement on its website. The lists were published on its website and include additional agricultural goods and energy exports, among other items.

These actions have been ongoing since early Spring 2018, when tariffs on 818 product lines valued at $34 billion (List 1 products) were first announced. The imposition of the US duties was the result of the Office of the United States Trade Representative's (USTR's) Section 301 review of certain Chinese practices that it found to:

  • be unfair;
  • be illegal under World Trade Organisation rules;
  • be harmful to US interests; and
  • hinder free and fair trade between the two countries.(1)

Although there has been no change to the proposed duty rate yet, the USTR has instructed parties to address the possible increase from 10% to 25% as part of the ongoing notice and comment process. Given the addition of this factor, the deadlines to submit written comments and requests to appear at the hearing regarding the Section 301 List 3 products are being adjusted. The new schedule for participating in the notice and comment process for List 3 products is as follows:

  • request to appear at hearing – 13 August 2018 (note that a summary of anticipated hearing statements and any pre-hearing comments must be submitted at this time);
  • public hearing – 20 to 23 August 2018 (to be held at the International Trade Commission); and
  • submission of written comments and post-hearing rebuttal comments – 5 September 2018.

Comment

Due to the significant potential impact that these additional duties may have on a wide range of products from China, importers are urged to review their imports from China and, if they are importing any of the products on List 3, to consider, at a minimum, filing written comments and possibly appearing at the public hearing.

For further information on this topic please contact David R Hamill, Teresa Polino, Diana Quaia or David Salkeld at Arent Fox LLP by telephone (+1 202 857 6000) or email ([email protected], t[email protected], [email protected] or [email protected]). The Arent Fox LLP website can be accessed at www.arentfox.com.

Endnotes

(1) For further details, please see "Section 301: more lists and process for product exclusions" and "USTR publishes final Section 301 duty list with eye towards adding more".

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